Tech Leads the Seattle Office Rent Growth Charge

Tech industry expansion is driving office market rent growth in North America’s tech hubs, according to CBRE’s annual Tech 30 report. The report, now in its 10th year, measures the industry’s impact on office demand and rents in the 30 leading tech markets in the U.S. and Canada as well as certain tech-heavy submarkets.

The Puget Sound region led all markets with a 15 percent increase in office rents during the past two years. In addition, Seattle’s Lake Union submarket ranked second for office rent growth among 30 leading tech-heavy submarkets.

Following greater Seattle, three other markets also posted double-digit gains: Vancouver (13.3 percent), Charlotte (11.2 percent) and Austin (10.8 percent). Overall, more than two-thirds of the top 30 North American tech markets registered office-rent growth from the second quarter of 2019.

“Many Puget Sound tech companies have grown their business during the pandemic. While most are embracing a hybrid work format, they are also investing in office space as part of their plans for future growth. Their demand for modern collaborative office space is rooted in fostering innovation. It is pushing rents to historically high levels,” said Brian Biege, senior vice president with CBRE’s tech and media practice in Seattle.

The tech industry led a rebound in U.S. office-leasing activity in 2021, fueled by increased hiring along with demand for tech products and services. Tech companies claimed a 22 percent share of U.S. office-leasing activity in the second and third quarters combined, up from 17 percent for all of 2020. Tech companies’ office leasing activity increased by 122 percent on average in the second and third quarters, compared to the first.

The gains in tech’s office leasing underscore the industry’s resilience during the pandemic. U.S. tech employment now exceeds its precrisis level by 3.3 percent, surpassed only by the life sciences industry (6.9 percent). Greater Seattle recorded the second-highest tech-job growth rate in North America (a gain of 22 percent) in the past two years, followed by Vancouver (21 percent). Only Toronto added tech jobs faster (a gain of 26 percent).